Private-equity giant Blackstone Group has promoted Jonathan Gray to replace Tony James as COO.

Gray, 48, has run the firm's global real estate group since 2005.

Gray joined the firm out of college in 1992 and has built a billion-dollar fortune in his time there.

Alternative-asset management giant Blackstone Group has tapped 48-year-old billionaire Jonathan Gray as its next chief operating officer, the company announced Tuesday.

Gray, who has run the firm's massive global real estate group since 2005, replaces long-time president and COO Tony James, who will slide into the role of executive vice chairman.

Gray joined the firm fresh out of college in 1992 and has long been viewed as a potential successor to founder and CEO Steve Schwarzman, whom he will report to.

"I've learned over the last 26 years that Jon Gray has great judgment, enormous energy and unique personal charisma, which has enabled him to garner enormous respect within the global financial community," Schwarzman said in the statement. "His strong values and passion for excellence are the embodiment of Blackstone's core principles. The appointment of Jon as President and COO lays the foundation for the next generation of senior management and positions the firm well for future leadership."

Like Schwarzman, who is worth $12.8 billion according to Forbes, Gray has built a massive fortune in his years running real estate for the company. Forbes estimates his net worth at $2.5 billion.

"I have spent my entire career at Blackstone and could not be more proud to be part of this firm," Gray said in the statement. "Despite our tremendous success to date, I am quite excited about the opportunity to continue to innovate for both our investors and shareholders."